The Auto Industry Effect

The auto industry is on the verge of a collapse.

October Sales
The Big Three (GM, Ford, Chrysler) have been losing money for a while. On Monday, October U.S. auto sales data continued to paint a dire picture. GM sales plummeted 45%, Chrysler sales dropped 35%, and Ford fell 30%. GM burns through $1 billion in cash a month to support it's unprofitable business.

What's the problem?
1) Asian automakers make more fuel efficient cars. Although they're doing better than the Big Three, they're also struggling. Toyota, Honda, and Nissan sales fell 23%, 25%, and 33%, respectively.
2) People can't afford them. People can't borrow. Banks won't lend. "Saved by Zero"? Not if you're poor.
3) People don't need them. During the easy borrowing days people bought first cars they didn't need. People bought second cars they didn't need. This screwed up the demand cycle and replacement cycle by pushing purchases forward. In other words, people already have relatively new cars.

What if...
One of the Big Three failed? The Center for Automotive Research said the U.S. could lose up to 2.5 million jobs and personal incomes would fall by $125 billion in the first year. These are big numbers.

Why the big number? If an automaker fails, then suppliers will fail, suppliers' suppliers will fail, car dealers will fail, diners will fail, bars will fail, towns will fail...